Debt Counseling Advice – Complete Review
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
Managing debt can seem scary. It might feel like there are too many choices and not enough help.
But don’t worry; you’re not alone. Every month, over 170,000 people visit our website seeking advice on debt matters.
In this easy-to-understand review, we’ll tell you:
- What debt counselling is and how it can help you
- Steps to take if you’re worried about your debt
- Ways to avoid getting into debt
- The pros and cons of debt counselling
- How debt counselling could impact your credit
Debt can be a big worry — the options can seem puzzling, and it might be tough to know what to do. We understand how you feel, and we’re here to help you understand more about debt counselling.
What is debt counselling?
Debt counselling is a formal and legal process. It allows you to get in touch with a debt counselor to help you with your debt problems.
Your debt counselor reviews your financial situation and restructures your payment plan. Then a court order is received which confirms your new payment.
How can debt counselling help?
There are a number of benefits of debt counselling. I will list down the most significant ones for you.
These include:
- Your creditors will no longer be able to take action against you if you are in Debt counselling.
- Your creditors can not contact you directly.
- You do not have to worry about people finding out that you went through debt counselling. This is mainly because there is no permanent record kept of individuals who undergo debt counselling.
- You only have to make one monthly payment
- The budget that will be decided for you will take your financial position into consideration first.
- Your monthly payments are based on your affordability and before the provisions are decided for your debts.
- You will be advised methods of saving and cost-cutting.
How a debt solution could help
Some debt solutions can:
- Stop nasty calls from creditors
- Freeze interest and charges
- Reduce your monthly payments
A few debt solutions can even result in writing off some of your debt.
Here’s an example:
Situation
| Monthly income | £2,504 |
| Monthly expenses | £2,345 |
| Total debt | £32,049 |
Monthly debt repayments
| Before | £587 |
| After | £158 |
£429 reduction in monthly payments
If you want to learn what debt solutions are available to you, click the button below to get started.
Are there any disadvantages of debt counselling?
There could be some disadvantages associated with debt counselling.
These include:
- In case you are going through debt counselling, you might not be allowed to get more credit.
- Since the fees is set by law, you will have to make some payments for counselling
- It could take longer than usual to pay off your debt. This is because you will be paying less than the debt you took for each month.
Can debt counselling affect your credit?
If your counselors negotiate to lower the interest rate, this could hurt your credit score.
A reduced credit score could stay in your file for an extensive period of time. This could affect your ability to get loans in the future.
Creditors will be able to review your file and may not agree to lend you.
Thousands have already tackled their debt
Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.
Natasha
I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.
Reviews shown are for The Debt Advice Service.
Frequently Asked Questions (FAQs)
- You do not make enough money to keep up with your monthly payments.
- Your debt loan is too much.
- Your credit score is significantly low and does not qualify
- Reducing your monthly payments to make it affordable for you
- Contacting your creditors so they do not force you directly to make payments
- Protecting your assets. This includes your home
- Money Advice Service
- StepChange
- PayPlan
- National Debt Helpline
- Citizens Advice
